April 7, 1998
Conseco to Acquire Green Tree Financial; Transaction Expected to
be Immediately Accretive
CARMEL, Ind.--(BUSINESS WIRE)--April 7, 1998--Conseco, Inc. (NYSE:CNC) and
Green Tree Financial Corp. (NYSE:GNT) today announced that their boards of directors
have unanimously approved a definitive merger agreement calling for a tax-free,
stock-for-stock transaction that would create the nation's largest public company (market
capitalization) engaged exclusively in life/health insurance and consumer finance.
Under the terms of the agreement, each of Green Tree's common shares will be converted
into 0.9165 of a share of Conseco common stock. Based on Conseco's closing price on
Monday, April 6, 1998, the total merger consideration, including payment for outstanding
stock options, would be approximately $7.6 billion. Green Tree stockholders will own
approximately 38 percent of the combined company.
The transaction will be accounted for as a pooling of interests and is expected to be
completed in the third quarter of 1998, subject to approval by shareholders of both
Conseco and Green Tree; regulatory approvals; and other conditions of closing. The
transaction is expected to be immediately accretive to Conseco's earnings per share.
The transaction firmly establishes Conseco as a financial services industry leader, with
balance sheet assets, managed investments and finance receivables of more than $65 billion;
more than $20 billion of market capitalization; and a shared base of 11 million customers.
"Our acquisition of Green Tree will make Conseco a leading provider of insurance and
financial services," said Stephen C. Hilbert, Conseco's chairman, president and chief
executive officer. "This transaction diversifies Conseco's earnings and cash flow sources,
and it opens up several new, higher-growth markets. It strengthens Conseco's 'middle
America' consumer franchise, expands our distribution capabilities and provides extensive
cross-marketing opportunities under the umbrella of our emerging national brand.
"The financial services industry is converging rapidly, as recent events make abundantly
clear," Hilbert said. "Traditional categories, and traditional companies, are disappearing. The
companies that will thrive in the future will have balanced, focused products; diversified
distribution embracing non- traditional channels; disciplined expense management;
sophisticated asset/liability management skill; hard-working capital; and an entrepreneurial
spirit. This is who we are.
"Conseco and Green Tree are ideal partners," Hilbert said. "With $28 billion of managed
finance receivables and one of the fastest internal growth rates in the finance business, Green
Tree ranks among the nation's largest multi-line finance companies. Green Tree is number
one in manufactured housing finance, a top five retail originator of non-conforming
mortgages and is a growing presence in consumer finance, retail credit services and
commercial finance. That's why we are so excited about this opportunity to join forces with
Green Tree's superior management, operations and sales teams. I couldn't be more pleased
that Larry Coss is going to continue to lead Green Tree. Larry founded the company in
1975 with $17,000 of capital. He has built one of the leading consumer finance
organizations in the country and has developed the finest management team in the consumer
finance industry."
"Green Tree's customers, dealers, employees and investors can all look forward to deriving
substantial benefits from our exciting combination with Conseco," said Green Tree
Chairman and Chief Executive Officer Lawrence M. Coss. "The two organizations are also
an unusually complementary cultural fit. Both Conseco and Green Tree are lean, aggressive,
performance-oriented organizations which embrace non-traditional distribution channels.
We are anxious to capitalize on the numerous joint opportunities that we see."
In connection with the merger agreement, Green Tree has granted Conseco an option to
purchase 26.7 million shares of Green Tree common stock (19.9 percent of Green Tree's
outstanding stock) at $52.93 per share.
Green Tree will continue to operate from its existing headquarters in St. Paul, Minnesota,
and its 200 local offices throughout the country. Coss will continue to manage Green Tree's
business, which will operate as a new subsidiary of Conseco.
Merrill Lynch & Co. acted as financial advisor and provided a fairness opinion to Conseco.
Lehman Brothers Inc. acted as financial advisor and provided a fairness opinion to Green
Tree.
Green Tree Financial Corporation is a leading diversified financial services company with
nationwide operations serving customers in the consumer finance, commercial finance and
insurance markets. Founded in 1975, Green Tree has 6,000 employees at 200 company
locations that work with over 20,000 independent retail dealers across the country as well
as directly with consumers and businesses.
Headquartered in Carmel, Ind., Conseco is a financial services organization dedicated to
providing its customers with solutions for both wealth protection and creation. Serving 9
million policyholders in partnership with 190,000 independent and career insurance agents
across America, the Conseco companies are among the nation's leading providers of
supplemental health insurance, retirement annuities and universal life insurance.
Conseco: All statements, trend analyses and other information
contained in this report and elsewhere (such as in other filings by
the Company with the Securities and Exchange Commission, press
releases, presentations by the Company or its management or oral
statements) relative to markets for the Company's products and trends
in the Company's operations or financial results, as well as other
statements including words such as "anticipate," "believe," "plan,"
"estimate," "expect," "intend," and other similar expressions,
constitute forward-looking statements under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to known and unknown risks, uncertainties and other factors
which may cause actual results to be materially different from those
contemplated by the forward- looking statements. Such factors
include, among other things: (i) general economic conditions and
other factors, including prevailing interest rate levels, stock
market performance and health care inflation, which may affect the
ability of the Company to sell its products, the market value of the
Company's investments and the lapse rate and profitability of the
Company's policies; (ii) the Company's ability to achieve anticipated
levels of operational efficiencies at recently acquired companies, as
well as through other cost-saving initiatives; (iii) customer
response to new products, distribution channels and marketing
initiatives; (iv) mortality, morbidity, usage of health care services
and other factors which may affect the profitability of the Company's
insurance products, (v) changes in the federal income tax laws and
regulations which may affect the relative tax advantages of some of
the Company's products; (vi) increasing competition in the sale of
the Company's products; (vii) regulatory changes or actions,
including those relating to regulation of financial services
affecting (among other things) bank sales and underwriting of
insurance products, regulation of the sale, underwriting and pricing
of insurance products, and health care regulation affecting the
Company's health insurance products; (viii) the availability and
terms of future acquisitions; and (ix) the risk factors or
uncertainties listed from time to time in the Company's other filings
with the Securities and Exchange Commission. In addition to the
above, these statements are subject to uncertainties related to the
synergies, charges and expenses associated with the Green Tree
merger.
Green Tree: Certain information included here may include
"forward-looking" information, as defined in the Private Securities
Litigation Reform Act of 1995 (the "Act"). Such forward-looking
information may involve risks or uncertainties which are described in
the Cautionary Statements contained in the Company's Form 8-K filed
with the Securities and Exchange Commission on July 12, 1996.
Investors are specifically referred to the Cautionary Statements for
a discussion of factors which could affect the Company's operations
and financial performance. Factors referenced in the Cautionary
Statements include: prevailing economic conditions; ability to access
capital resources; short-term interest rate fluctuations; the level
of defaults and prepayments on loans made by the Company;
competition; and regulatory changes. Any forward-looking information
is based upon management's reasonable estimate of future results or
trends. The Company does not undertake, and the Act specifically
relieves the Company from, any obligation to update any
forward-looking statements.
World Wide Web conseco.com
Investor Hotline 800.4.CONSECO
Fax-on-Demand 800.344.6452
CONTACT: Conseco
Jim Rosensteele
Senior Vice President-Corporate Communications
317/817-2893
or
Green Tree
John A. Dolphin
Vice President
612/293-3400
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